FT rejects rivals’ network charges accusations

25 Mar 2009

French former fixed line monopoly France Telecom (FT) has rejected rivals’ accusations it is abusing its dominant position in relation to the amount it charges competitors for accessing its fixed line network. The Financial Times quotes Orange France deputy managing director Louis-Pierre Wenes, as saying that demands by rival firms that it should hive off its fixed line network operations are unfounded and constitute ‘attempts by our competitors to try to change the rules of the game and raise their profits’. FT’s harshest critics, Vivendi-backed SFR and Iliad (Free), have jointly filed a complaint with the European Commission alleging that FT is stifling competition. They allege the former monopoly’s 2008 EBITDA of EUR7 billion (USD9.4 billion) – as compared with SFR’s EUR700 million and EUR400 million for Iliad (Free) – is proof positive of the incumbent’s continued domination of the market. FT’s rivals claim the former monopoly is over-charging its rivals for access to its legacy copper wire network, and contend the telco overpaid for TV content rights in an effort to squeeze the profits of rivals such as Canal+. In its defence, Mr Wenes pointed to the fact that FT is losing around 200,000 fixed line connections every quarter to competition, and that its access charges are needed to maintain and upgrade its ‘old’ copper network.

France, Orange Group